After the divorce process has started, most people only think about a few assets that will be divided between the spouses once the divorce is finalized. This usually includes the home, cars or motor vehicles, real property, and household goods. But retirement accounts are one of the largest assets often overlooked in a divorce proceeding.
Retirement accounts might be subject to division following a divorce even if the account, including pensions, 401K or 403B plans, traditional IRAs, and Roth-IRAs, is only in one of the spouse’s name.
Dividing retirement accounts can be a difficult process, especially if the account existing prior to the marriage.
Divorcing spouses may agree to split up retirement accounts or use them strategically in an overall property settlement. If the case proceeds to a trial, a court may also determine that a retirement plan benefit is marital property and subject to division following the divorce.
In some cases, the divorce attorney will need to prepare a legal document called a Qualified Domestic Relations Order. A Qualified Domestic Relations Order, or QDRO for short, splits and changes ownership of a retirement plan or a portion of the retirement plan to give one of the spouses after the divorced become final.
An experienced Minnesota divorce attorney can guide their clients through dividing up retirement accounts in an equitable way, draft QDROs, and understanding significant tax implications.